In the current climate, it is no surprise that smaller companies are struggling to raise money from investors. And according to analysis from Grant Thornton, the value of funds raised on Aim in the first quarter of 2008 dropped by 60% compared with the same time last year.
The value of new issues on Aim fell by 70% to £339m, while the amount of money raised by companies already listed on the junior market was down 53% to £793m.
The volume of new companies listing also dropped to 34 in the quarter, down from 54 in the first three months of 2007.
"Aim continues to be open for business but only for those companies with stories that are in line with the very specific demands of investors at present," said Philip Secrett, international director of capital markets at Grant Thornton. "Investors are now sitting on their hands and, while they may be more willing to participate in secondary issues for Aim listed firms they already know, raising substantial sums of money for new companies will only be an option for a select few."
Sectors which remained popular included energy and commodity firms, representing over 50% of primary issues raised during the quarter.
And with Aim facing potential competition from overseas markets, Secrett said it needed to promote itself more throughout Asia and eastern Europe.
